Economics of aging.

• Position: Conferences - NBER conference on the economics of aging, May 2003

The NBER's held another in a series of conferences on the economics of aging on May 2-4. Program Director David A. Wise of Harvard University organized this agenda:

James M. Poterba, NBER and MIT; Joshua Rauh, MIT; Steven F. Venti, NBER and Dartmouth College; and David A. Wise, "Utility Evaluation of Risk in Retirement Saving Accounts"

Discussant: Bob Willis, University of Michigan

James Choi, Harvard University; David Laibson, NBER and Harvard University; Brigitte Madrian, NBER and University of Chicago; and Andrew Metrick, NBER and University of Pennsylvania, "Optimal Defaults"

Discussant: Antonio Rangel, NBER and Stanford University

David M. Cutler, NBER and Harvard University, "Intensive Medical Technology and the Reduction in Disability"

Discussant: Alan M. Garber, NBER and Stanford University

Thomas E. MaCurdy, NBER and Stanford University, "Explanations for the Growth in Medicare Cost"

Discussant: Jonathan S. Skinner, NBER and Dartmouth College

Jonathan S. Skinner, Elliot S. Fisher, and John W. Wennberg, Dartmouth Medical School, "The Efficiency of Medicare?"

Discussant: Alan M. Garber

James P. Smith, RAND, "Consequences and Predictors of New Health Events"

Discussants: David M. Cutler

Anne C. Case, NBER and Princeton University, and Angus S. Deaton, NBER and Princeton University, "Broken Down by Work and Sex: How our Health Declines"

Discussant: Daniel L. McFadden, NBER and University of California, Berkeley

Robert T. Jensen, NBER and Harvard University, "Support for Widows in Underdeveloped Countries"

Discussant: Esther Duflo, NBER and MIT

Florian Heiss, University of Mannheim; Michael D. Hurd, RAND and NBER; and Axel Borsch-Supan, NBER and University of Mannheim, "How the Health-Wealth Nexus is Moderated by Family Closeness"

Discussant: Steven F. Venti

Arie Kapteyn and Stan Panis, RAND, "Individual Retirement Planning, Institutions, and Outcomes"

Discussant: Andrew Samwick, NBER and Dartmouth College

Axel Borsch-Supan, and Lothar Essig, University of Mannheim, "Household Saving in Germany--Results of the First SAVE Study"

Discussant: Andrew Samwick, NBER and Dartmouth College

Li Gan, NBER and University of Texas; Michael D. Hurd; and Daniel McFadden, "Individual Subjective Survival Curves"

Discussant: Bob Willis

Poterba, Rauh, Venti, and Wise develop a stochastic simulation algorithm to evaluate the effect of holding a broadly diversified portfolio of common stocks, or a portfolio of index bonds, on the distribution of 401(k) account balances at retirement. They compare the alternative distributions of retirement wealth by showing the empirical distribution of potential wealth values and by computing the expected utility of these outcomes under standard assumptions about the structure of household preferences. Their analysis highlights the critical role of other sources of wealth, such as Social Security, defined benefit pension annuities, and saving outside retirement plans, in determining the expected utility cost of holding equities in the retirement account. Their findings also demonstrate the importance of the equity premium in affecting investors' utility from different retirement asset allocations. Viewed from the beginning...